CETES

CETES by Etherfuse is backed by MXN denominated, short term bonds issued by the Federal Government of Mexico. These bonds are the Mexican counterpart of US treasury bills.

Reserves backing CETES are held across regulated custodians in Mexico. A majority of reserves are held by Banco Bilbao Vizcaya Argentaria, better known as BBVA Mexico. Etherfuse publishes monthly attestations, including a breakdown by each custodian.

Client assets are segregated from Etherfuse corporate funds. The issuer takes deposits “in administration” - referring to itself as a custodian of funds, rather than owner. Further, all transactions related to CETES reserves take place in segregated accounts.

While many key elements of bankruptcy remoteness are present in Etherfuse, there remains uncertainty due to a lack of legal precedent and regulatory clarity.

While onchain secondary markets for CETES exist, they are limited by liquidity. All users must onboard directly with Etherfuse to access the primary market at net asset value. CETES is fully collateralized with an additional collateral buffer supporting instant transactions.

CETES is suitable for non-US, institutional or retail users who can complete a KYC process and want to earn yield paid by the Mexico's Ministry of Finance in an onchain format. Holders accept the credit risk of lending to the Mexican government and the inflation risk of holding assets denominated in MXN.

The following outcomes outside the issuer’s control may improve factor scores.

• Mexico implements legislation that specifically addresses issuers of tokenized bond products.

• Mexico receives a higher score in the World Bank’s Rule of Law governance indicators.